Business Directories

HSBC Oman unit sees sharp drop in profit

Muscat, January 30, 2013

HSBC Bank Oman, formed last year by a merger of HSBC's Oman unit and Oman International Bank, posted a 62.7-percent slump in 2012 net profit, the bank said in a statement on Wednesday, hurt by integration costs and bad loans.

The lender, Oman's second-largest by market capitalisation, made a net profit of 5.8 million rials ($15.1 million) in 2012, compared with 15.5 million rials in 2011, the bourse filing from the bank said.

In the fourth quarter, HSBC Bank Oman made a net loss of 4.77 million rials, according on Reuters calculations based on the company's nine-month net profit of 10.57 million rials.

Non performing loans as a percentage of total loans jumped to 7.1 percent at the end of 2012, compared with 1.2 percent at the end of the previous year, the statement said.

Operating expenses rose to 48.7 million rials, which included 13.9 million rials of integration costs, the bank said without detailing how much the increase was.

The formal completion of the merger was announced at the beginning of June, with HSBC holding 51 percent of the new entity. Previously, OIB was Oman's fifth-largest bank, with the second-largest branch network in the country and gross assets of $3.2 billion.

The board of directors proposed a cash dividend of 0.001 rials per share, the statement added.

In October, one of Oman's richest businessmen increased his shareholding in the bank to 25 percent from 18.39 percent. - Reuters